BCE takeover given final clearance by Supreme Court

23 Jun 2008

Canada’s Supreme Court on Friday gave the go-ahead for a CAD51.7 billion (USD51.9 billion) cash and debt takeover of the country’s largest telecoms group BCE, overturning an earlier ruling by the Quebec Court of Appeal. Bondholders of BCE, the parent of Bell Canada and Bell Aliant, had contested a leveraged buyout of BCE by the Ontario Teachers’ Pension Plan (Teachers), on the grounds that BCE had disregarded their interests by massively increasing the company’s debt, but the Supreme Court decision clears the final hurdle to completing the deal by its scheduled deadline at the end of this month. The Teachers consortium also includes US-based private equity houses Providence Equity, Madison Dearborn and Merrill Lynch Global Private Equity, and is backed by banks including Citigroup, Deutsche Bank, Royal Bank of Scotland and Toronto-Dominion, which said in a statement on Friday that they expect the deal to close in accordance with the original agreement; it had earlier been rumoured that the banks wanted to restructure the terms of their lending agreement.

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